Social Security's Dirty Little Secret

We all know that Social Security has some major flaws but most folks don't know about the widow blackout period.  This is a slap in the face for the surviving spouses of life long contributors to the Social Security system, but it's also the government's dirty little secret.

Let's say that you are a woman, and your husband works as the sole bread winner while you raise the children.  You get married at 23 have 3 kids over the next 6 years and when your youngest turns 16 your husband dies from a surprise heart attack.

After grieving for the loss you apply for survivor's benefits from social security (because he paid in for 22 years and made a good living during those years) but instead of a check you get told that you have to wait 15 years until you are 60 to draw out his your benefits. 

So there you are with 2 kids in college and one in high school little or no work experience and no income coming in from your husbands lifetime of contributions!  I don't know about you, but I would say that sucks!  This system increases a woman's chance of living in poverty from 5% to 20% just because of the death of her husband.

What do you do?  Well, the only thing you can do is to plan a head and make sure that you have something in place to bridge the gap.  One plan that can be put in place is to take out a life insurance policy that will fill that gap until social security survivor benefits would kick in.  You will need to decide how much coverage you need by taking the average Social Security payment that the working spouse would receive at full retirement age and multiple it by the number of years until surviving spouse turns age 60.  For Example a man that earns $4,000 a month dies when his wife is 50 and they have no children under the age of 18, his Social Security payment at full retirement age would have been $1721 a month or $20,652 a year.   His widow would need $206,520 to make up for the loss of Social Security benefits during the next 10 years until she reaches age 60 and can begin drawing survivor benefits.

If you don't know what your working spouse's Social Security benefits would be you can go to the SSA's website and use their quick calculator to find that amount out.  Here is a link to their basic calculator http://www.ssa.gov/OACT/quickcalc/index.html  Once you have that amount you can multiple it by the number of years until your 60th birthday ... then call your insurance agent for a quote on an inexpensive term policy that will protect you until then.

J